The Bank of Agriculture (BOA) and the Nigeria Postal Service (NIPOST) have entered into a partnership which will enhance effective grassroots coverage in input distribution and access to loan facilities for rural farmers.
The proposed collaboration is also expected to serve the purpose of BOA for network expansion at minimal cost and NIPOST for asset optimisation.
A Memorandum of Understanding (MoU) was signed to that effect by the MD of BOA, Kabir Mohammed and the Postmaster-General of the Federation, Mr Bisi Adegbuyi, at the BOA office in Abuja.
The Bank of Agriculture is Nigeria’s only retail development financial institution charged with the delivery of financial services to the agricultural communities across the value chain, as well as financial inclusion of the rural economy.
To achieve this objective, BOA requires extensive reach in the rural areas and farming communities for effective discharge of its mandate.
Furthermore, there is the need to build an extensive network of physical and technology-driven delivery channels that would enable farming communities, value chain players and the rural economy have easy access to financial services in close proximity to their areas of operation.
Building such an extensive network of service delivery channels has implications both in terms of cost of the network locations, as well as the physical requirements for storage and logistics of agriculture such as input distribution and output aggregation.
BOA currently has 140 branches and six zonal offices across the country, a network considered grossly inadequate to service its mandate given the land mass of the nation.
There is need to build a more extensive service delivery network to enhance the bank’s distribution and collection capabilities in a cost effective manner.
NIPOST has approximately 1,184 post offices and about 600 functioning postal agents and post shops, 70 per cent of post outlets are located in rural areas where farmers live.
Sorting offices of most rural post offices are highly underutilised and can be used as warehouses for farm implements and inputs in the planting seasons and output aggregation in the harvest seasons, which would enhance prospects for an effective warehouse receipt system in the medium term.
Most standard post offices have purpose built vaults and strong rooms for security of cash of the BOA and other instruments.
Both BOA and NIPOST have a common objective of reaching a mass market to deliver much needed services in the public good.
NIPOST requires to optimise its existing real estate asset base and has variously considered the delivery of financial services as a pathway to the optimization.
Targeted services relevant to host communities in financial service delivery, input distribution and output aggregation is considered appropriate in meeting the core objectives of both organisations.
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